The objective of this project is to uncover the molecular mechanisms of genetic rearrangements. The transposition reaction of bacteriophage Mu is studied as a model system. Critical steps in Mu transposition are a pair of DNA cleavages and strand transfers involving the ends of Mu DNA sequence and a target DNA; these reactions generate a branched DNA intermediate. The two chemical reaction steps take place within higher order protein-DNA complexes called transpososomes, the core of which is composed of two Mu-end DNA segments synapsed by a tetramer of MuA transposase protein. Transpososome assembly is controlled by a number of cofactors: an enhancer type DNA sequence element called IAS that overlaps the Mu operator sequence and the Mu repressor that binds to it, the MuB protein, the E. coli-encoded HU and IHF proteins, ATP, and Mg++. By making use of a simplified transpososome assembly reaction system, we have shown that both the Mu end DNA cleavage and the subsequent strand transfer at one Mu DNA end are catalyzed by the MuA monomer that is bound to the partner Mu DNA end within a transpososome. For Tn10 and Mu transposition, two transposase monomers within the transpososome have been shown to catalyze all the chemical steps at the two transposon ends. By comparing the activity of chiral phosphorothioate containing DNA substrates, we could deduce the change of orientation of the substrate DNA within the transposase active site throughout the successive reaction steps. MuB ATPase controls each of the early steps of Mu DNA transposition: it assists transpososome assembly, is involved in the target DNA site selection, activates the MuA transposase for strand transfer reaction, and protects transpososome from premature disassembly by ClpX chaperon protein until strand transfer is completed and the transposition intermediate is ready for DNA replication by the host replication proteins. In turn, the functional state of MuB is controlled by the ATPase cycle and by its interaction with MuA. Structural and functional aspects of MuB-DNA complex are currently under investigation by using a variety of physical and biochemical techniques. The molecular interactions involved in the transposition complex of phage Mu were studied by using fluorescence labeled proteins and DNA. Fluorescence-based tools have been developed for the assay of transposase-DNA binding, Mu-end pairing, stable synaptic complex formation, and Mu-end DNA deformation. Techniques and instruments have been developed to study these reactions at the single molecule level by using a sensitive fluorescence microscope/CCD camera system. The assembly and disassembly of protein-DNA complexes, and also the conformational changes within the complex during the reaction are currently studied in real time both by ensemble-level and single-molecule experiments. Efforts are continued toward solving the high-resolution structure of the higher order protein-DNA complexes involved in transposition reactions.